Chinese e-commerce newcomer in the U.S., Temu, is taking compatriot Shein and their “bullying” ploys to court

Screen shots of the Temu and Shein websites

It is a Chinese company versus another Chinese company. The battleground is the United States of America, where, ironically, the US had, since the Trump years in the White House, wanted to decouple itself from the Chinese economy. Temu, the one-year-old online marketplace based in Shanghai and now in their early foray into the American market, has accused Shein of “unlawful exclusionary tactics”, as Reuters reported. The former has launched a lawsuit against Shein for violating U.S. antitrust laws. Temu stated that they had to resort to legal means to shield themselves against what they have called “escalating attacks” from the better-known Shein. One example cited by the American press is Shein’s use of “threats and intimidation” to prevent clothing manufacturers from collaborating with the newcomer.

Temu, much like Shein is essentially an online marketplace, except that they seem to sell an even larger array of merchandise, not just apparel. They were launched in the U.S. sometime in summer last year. It is owned by the Chinese e-commerce site 拼多多 or Pinduoduo (parent company: PDD Holdings), a platform not unlike most in China: sprawling (or long, if you are viewing on their app installed in your phone) and potentially confusing to use. When we took a closer look at the busy Temu site, it is a veritable online pasar malam, with cheap—even next to nothing—being the main draw. Shein, thus, appears to be more fashion-centric. Last December, Time reported that the Temu app was the most downloaded on the Apple Store and Google Play. The magazine also drew attention to what has become a problem for Temu: “undelivered packages, mysterious charges, incorrect orders, and unresponsive customer service”.

When we took a closer look at the busy Temu site, it is a veritable online pasar malam, with cheap—even next to nothing—being the main draw

Interestingly, Temu was, in March, served a lawsuit by Shein’s U.S. holding company, Roadget Business Pte Ltd, for—as alleged—“willfully and flagrantly infringed exclusive and valuable trademark rights and copyright rights and has engaged in unfair competition and false and deceptive business practices, including by impersonating [the] brand on social media, trading off of the well-known Shein trademarks and using copyrighted images owned by Roadget as part of Temu’s product listings.” If that sort of sounds familiar, it is. Earlier, three unnamed designers sued the Shein with claims of “egregious” copyright infringement and racketeering under a suit that dramatically alleged Shein violated the Racketeer Influenced and Corrupt Organizations (or RICO) Act, passed in 1970 to rein in and prosecute organised crime.

According to Bloomberg, Shein has captured some 75% of the US market for what has become known as ultra fast fashion. They presently enjoy a US$66 billion valuation. It is unsurprising, therefore, that Shein would resort to all sorts of ways to secure its position, including getting American influencers to sing praises of the brand by bringing women easily taken in to Guangzhou to see the company’s model factories. Reuters quoted Temu saying that Shein “forces manufacturers to sign loyalty oaths certifying that they will not do business” with the former. A Shein spokesperson told the news site: “We believe this lawsuit is without merit and we will vigorously defend ourselves.” The Chinese fighting among themselves are as old as the Chinese civilisation itself. From the Battle of Banquan (阪泉之战) in the 26th century BCE to the Civil Wars of the 20th century, there have been scores of serious, history-making conflicts. Only now, the Temu-Shein fight for retail dominance is not conducted on Chinese soil, and could be a long-drawn affair. As the Chinese themselves would say, 好戏在后头 (haoxi zai houtou) or the exciting plot is yet to come.